RETAIL

An identity crisis

Sears is struggling to redefine itself, freshen its look and reverse years of falling sales. In hip Santa Monica, the landmark store is showing its age.

Teira Gunlock, 29, grew up in Missouri and recalls monthly trips to the local Sears with her father. Now a Los Angeles resident, she was at the Santa Monica Sears the other day, hunting for washers and dryers and growing frustrated. She said it took her what felt like half an hour to find where the appliances were located.

"There were no signs that I could see pointing out the appliance section in the basement," the healthcare consultant said. "You're left wandering around lost and confused. And no one comes to help."

The down-at-the-heels appearance is also an issue. Retail analysts estimate that Sears spends $2 to $3 a square foot annually on maintenance and upkeep expenses, including replacing tiles and fixing display racks. Retail chains such as Target Corp. and Wal-Mart Stores Inc. typically shell out $6 to $8 a square foot for annual upkeep, according to International Strategy & Investment Group.

Analysts say that reflects the cost-cutting strategy of majority shareholder and company Chairman Edward Lampert, who combined the Sears and Kmart chains in 2005. The company is in the midst of closing as many as 120 of its nearly 2,200 full-line U.S. stores as it seeks a turnaround. It also has been selling off assets, which has helped the bottom line.

For The Record Los Angeles Times Tuesday, July 31, 2012 Home Edition Main News Part A Page 4 News Desk 1 inches; 35 words Type of Material: Correction Santa Monica Sears: An article in the July 29 Business section about the Sears store in Santa Monica misidentified the architect of the original Santa Monica Place as Frank Lloyd Wright. It was Frank Gehry. For The Record Los Angeles Times Sunday, August 05, 2012 Home Edition Main News Part A Page 4 News Desk 1 inches; 35 words Type of Material: Correction Santa Monica Sears: An article in the July 29 Business section about the Sears store in Santa Monica misidentified the architect of the original Santa Monica Place as Frank Lloyd Wright. It was Frank Gehry.

For its latest quarter that ended April 28, Sears reported a profit of $189 million, compared with a loss of $170 million a year earlier. Its shares are up 63.2% since the start of the year, compared with 10.2% for the blue-chip Standard & Poor's 500 index.

Companywide efforts to turn around the brand are evident at the Santa Monica Sears. Tom Kennedy, the store's general manager, said the company has invested a "considerable" sum on updates in the last two years, including remodeling bathrooms, adding free Wi-Fi and redoing the lighting to replace the "really dungeon-y look" it had before.

"They have spent a lot of money on this store," Kennedy said. "All stores, whether they are JCPenney or Macy's or Sears, there's going to be some issues."

But customers complain that Sears is especially dowdy sitting across the street from the gleaming, open-air Santa Monica Place, which embodies what one expert dubbed "the next generation" of malls.

After a two-year, $265-million revamp, Santa Monica Place reopened in 2010 with glass walls, high-end retailers and a dining terrace full of fancy food options. The shopping center, previously an enclosed space designed by famed architect Frank Lloyd Wright, was hailed as one of the most ambitious malls in recent years.

Art Coppola, chief executive of Santa Monica Place owner Macerich, pointed out that although the Sears may be out of date, its location remains premium.

Sears has not announced plans to sell the Santa Monica store. But while the building itself is protected as a historic landmark, there would be nothing to prevent it being converted to another store, such as a Target.

Coppola, who recently stopped at the Santa Monica Sears to browse for a sporting goods item but left empty-handed, noted the store's prime real estate.

"It's hard to imagine it's operating at its highest and best use today," he said. "It's clearly a parcel of land that is very valuable."